Anything is possible in the whisky investment industry. You don’t even need to be an expert to make profits, take Mr Parfitt for example who spent £3,200 on a cask of single malt Macallan and another £1,500 on a cask of Tobermory back in 1994 – his investment is now netting him a return of 4,700%
There is nothing better than an uplifting story to shine light on another difficult year for many. It has been recently brought to attention that a father who spent £4,700 on two casks of Scotch whisky almost 30 years ago has recently sold them both for an eye-watering £225,000.
Roger Parfitt, a 59-year-old bank manager from Coventry, was able to utilise this sum of money to pay off his mortgage and help to aid in his retirement plan in order to retire three years earlier than expected, something which all aspire to be able to achieve.
Even though Mr Parfitt may not have has any previous knowledge of the whisky investment industry, he was able to appreciate the value of whisky as an asset and back in 1994 he spent £3,200 on a cask of single malt Macallan and another £1,500 on a cask of Tobermory, with the belief that as the whisky aged, the value would appreciate.
This decision was definitely a bold one, but has paid dividends in the long term, achieving far greater margins than other luxury assets. Upon the sale of the casks of whisky, Mr Parfitt has netted a return of 4,700% and a profit of £220,300.
It is even an extra bonus that the money he has made is also tax-free, as whisky casks are classed as a “wasting asset” by HMRC and are not subject to capital gains tax.
Mr Parfitt said: “I remember thinking, if it doesn’t appreciate in value, the worst that could happen is that you would have to get it out of the warehouse, bottle it and drink it.
“It always had that fall back for me – you could drown your sorrows if it didn’t work out financially.”
It is no surprise that Mr Parfitt wants to keep whisky investments within the family and now plans on buying a cask of whisky for his two children – which he will playfully dub “the cask of mum and dad”. Although such incredible margins may be hard to replicate, achieving appreciating value of an investment is highly appealing to all investors.
Whisky investment should not be treated any differently than any other investment, and hence it is important to factor in the risk of such an investment. It is impossible to confirm for certain the exact returns which can be achieved; this will vary from cask to cask and greatly depends on the time which the cask is allowed to mature for.
It is always recommended that investors educate themselves on the investment in order to ensure that the investors make an informed decision, understanding the casks with the best potential for their investment. Ultimately the aim is to achieve the best possible margins on the investment, which may require some expert guidance.
There are numerous ways in which investors can educate themselves to better understand the market. As the market has developed, there have become many useful websites and portals where investors can expand their knowledge. Research can be conducted using industry sites industry sites such as Scotchwhisky.com, Whisky Advocate, and The Spirits Business. Then in order to invest, it is imperative that investors have access to the most prestigious distilleries, which can be achieved by contacting investment businesses such as Elite Wine & Whisky.
The more and more than investors are being exposed to the market, the larger the industry is growing, with Knight Frank Wealth Report 2020 noting that the value of whisky has grown by 564% over the last 10 years; which outperforms any other luxury asset on the market.
Success stories like that shared by Mr Parfitt are becoming more and more common, with the most successful ever sale on record occurring at an auction at Sotheby’s in London, in which a special edition bottle of 1926 Macallan whisky fetched £1.5million in order to set a world record. It was previously thought that the bottle would sell for between £350,000 and £450,000, demonstrating the unpredictability of the market.
Elite Wine & Whisky hopes to be able to share more real life success stories following on from all of the wonderful happenings in the industry. Nick Green, the Managing Partner of Elite Wine & Whisky, is remaining optimistic that further positive results will be achieved in the coming years. “We are seeing more and more customers celebrating achieving margins on their investment which they have never achieved when investing in other commodities; it delights us to be able to be part of our investors’ journeys and enable them to grow their assets along with their knowledge”.